party, the terms of which are incorporated in the bill, binding on a thirdparty

Pursuant to freedom of contract principles, between owner and charterer

the terms of the charter party can be incorporated into a bill

of lading.

The said incorporation will be in principle ineffective with regard

to the third-party holder or endorsee as he is not a party to the charter

party being merely a party to the contract for the carriage of goods by

sea titled by the bill of lading. This will not be the case with regard

to the clauses of the charter party reproduced in the bill of lading, or

in the case that the former is attached to the latter. In these two last

cases, the clauses may be effective depending on the interpretation of

the clauses of the contracts. The same reasoning is valid for a jurisdiction

or an arbitration clause in a charter party, the terms of which

are incorporated in the bill. In addition, subparagraph (b) of article

29 of Decree-Law 352/86 states that ‘within the relations between

carrier and third-party holder of the bill of lading, with prejudice

of what on the contrary may be stated in the charter party, where

the bill of lading has been issued pursuant to the charter party, the

rules of Decree-Law 352/86 will prevail’. Article 30 of Decree-Law

352/86 states that the Portuguese courts will have jurisdiction for

actions arising from carriage of goods by sea if, inter alia the port of

loading or discharge is located in Portuguese territory, or the head

office, branch or agency of the shipper, receiver or consignee or the

carrier are located in Portugal.

Law 31/86 states that the arbitration clause has to be produced

in writing and inserted in a document signed by the parties or contained

in exchange of letters, telexes, telegrams or other means of telecommunication

of which there persists evidence in writing, whether

these instruments directly contain the arbitration convention itself, or

whether there is a clause in them referring to any document in which

said convention is contained. We presume that this will be applied

where the contracting parties are all the same for both contracts or

where the arbitration clause of the charter party is reproduced in the

bill of lading or if the former is attached to the latter, subject always

to the interpretation of both contracts.

37 Is the ‘demise’ clause or identity of carrier clause recognised and

binding?

The identity of the carrier clause is normally a standard one. Standard

forms of contracts are governed by Decree-Law 446/85. It is

defensible to sustain that the said clause will be valid and binding

where evidence is produced in court that cargo interests knew or

ought reasonably to have known of the existence and extent of said

clause. Note however that only the carrier of the goods can issue bills

of lading, as per subparagraph 5 of article 8 of Decree-Law 352/86.

Pursuant to paragraph 1 of article 10 of Decree-Law 352/86, bills of

lading issued by one who does not have the condition of a sea carrier

are null and void. Whoever, not being the sea carrier of the goods,

issues a bill of lading, is liable for damages caused to the shipper and

to others interested in the goods, pursuant to paragraph 2 of article

10 of Decree-Law 352/86. This does not prevent an agent of the carrier

to sign bills of lading on behalf of the carrier. Under article 28 of

Decree-Law 352/86, if the bill of lading is considered null and void

or if the sea carrier is not identifiable by the wording of the bill of

lading, the carrying ship will be liable in rem before cargo interests

under the same terms as the carrier.

38 Are shipowners liable for cargo damage where they are not the

contractual carrier and what defences can they raise against such

liability? In particular, can they rely on the terms of the bill of lading

even though they are not contractual carriers?

Article 7 of Decree-Law 352/86 states that the intervention of a port

operator or of any other agent of the contractual carrier in any operation

related to the cargo does not remove or exempt liability of the

contractual carrier before cargo interests. The contractual carrier

becomes entitled to act against the said port operator or agent in

recourse or redress. Article 800 of the Civil Code and article 377

of the Commercial Code states that the debtor (contractual carrier)

is liable before the creditor (other party to the sea carriage contract

– shipper, receiver or holder of the bill) for the acts and omissions of

his representatives, servants, agents or the persons or entities that he

uses to perform the carriage as if the said acts were performed by the

debtor itself. Ultimately, however, if the bill of lading is considered

null and void or if the sea carrier is not identifiable by the wording of

the bill of lading, the carrying ship will be liable in rem before cargo

interests under the same terms as the carrier.

39 What is the effect of deviation from a vessel’s route on contractual

defences?

Clauses inserted in a bill of lading allowing the carrier to deviate from

the vessel’s route are valid and enforceable against cargo interests.

Article 4(4) of the Hague Rules allows this deviation.

Portugal Andrade Dias & A ssociados

210 Getting the Deal Through – Shipping 2012

40 What liens can be exercised?

A lien can only operate by force of law and not by contract under

Portuguese law.

The carrier enjoys a retention lien by operation of statutory law

over the carried goods to secure any claims arising from the carriage

by sea, as per article 21 of Decree-Law 352/86. When the carrier

intends to exercise its retention lien, a notice must be served on the

receiver or on the consignee within the time limit of the subsequent

15 days after arrival of the ship in port. The carrier may elect to leave

the goods on board or to have them discharged and deposited. The

carrier shall be prevented to claim any compensation for the ship’s

stoppage if he elects to leave them on board and shall be obliged

to assure their diligent keeping and maintenance. The keeping and

maintenance costs shall run on cargo’s interest. The carrier shall have

a duty to start proceedings within the time limit of 30 days after

serving the notice informing cargo interests that he is exercising his

retention lien. When the cargo is of a perishable nature, the carrier

is entitled to apply to the court for permission to perform the anticipated

sale of the cargo. The carrier must also serve a notice to cargo

interests if they are known, informing that it will apply for permission

to have the cargo sold. The order shall be issued ex parte but the

counterparty may prevent the anticipated sale by offering adequate

security. The carrier shall have a retention lien over the sale proceeds

but the court can order the deposit of the said proceeds.

A priority lien (that is to say, a right to be paid by distribution

of sale proceeds with priority over common claims) over the ship,

freight, cargo and ship’s accessories is given by article 2 of the International

Convention for the Unification of Certain Rules relating

to maritime liens and mortgages, Brussels 10 April 1926 (of which

Portugal is a contracting state) and by articles 578, 580 and 582 of

the Commercial Code to a wide variety of claims. These priority liens

operate by force of law.

Assuming that the carrier has delivered cargo to someone that has

no lawful rights over the cargo, the carrier will be liable for breach

of the contract of the carriage of goods by failing to perform, in full,

the said contract.

As per article 20 of Decree-Law 352/86, if more than one person,

with sufficient title, claims for delivery of the cargo, the goods will

remain at the custody of the entity that has received them, up until

the court decides who has the right to receive them. In the case of

perishable goods, the carrier may sell the goods following permission

from the court and notice to the counterparty.

The carrier cannot limit his liability for wrongful delivery of the

cargo as the provisions contained in the Hague Rules and in Decree-

Law 352/86 in respect of limitation of liability are merely applicable

to loss or damage to cargo.

42 What are the responsibilities and liabilities of the shipper?

The shipper will be liable before the carrier for unpaid freight

and for any damages arising from omissions or mistakes in cargo

statements.

Jurisdiction and dispute resolution

The Lisbon Admiralty Court exercises jurisdiction over disputes that

have some sort of material connection with Portugal’s mainland. The

relevant material connections arise inter alia from: the port where

the ship is anchored; the port where the goods where loaded or

discharged; and where the tortuous event happened. Where such

connection is linked to the Azores or Madeira Islands territory, the

Civil Court shall have jurisdiction.

Three sets of rules may apply:

• European Union Regulation 1393/2007;

• the Hague Convention Related to Service and Notices Abroad of

Judicial and Non-Judicial Acts in Civil and Commercial Matters,

1965; or

EU Regulation 1393/2007 envisages four forms of service of papers

that can be described as follows:

• via appointed authorities;

• via diplomatic or consular channels (that can be used either to

transmit papers between appointed authorities or to serve papers

directly);

• via registered courier with acknowledgment of receipt or via an

equivalent procedure; or

• via direct service.

Each member state presented statements about the terms in which it

would apply the said EU Regulation. The statements can be found

on the European Commission’s web site (http://ec.europa.eu). Each

member state has declared what type of service of papers it accepts.

A plaintiff starting proceedings in Portugal against an EU-domiciled

defendant should comply with the relevant member state rules where

the defendant is domiciled.

The Hague Convention Related to Service and Notices Abroad

of Judicial and Non-Judicial Acts in Civil and Commercial Matters,

1965 envisages an identical structure as of the EU Regulation

1393/2007. The relevant contracting state party’ requirements need

to be ascertained on a case-by-case basis.

Under the Civil Procedure Code, service of court proceedings is

done by a letter (attached with the relevant papers to serve, which

are the points of claim and the attached documents) drafted by the

court and sent by the latter via registered courier with acknowledgement

of receipt to the defendants’ address. Note that this procedure

is used in arrest proceedings even if the defendant is domiciled in an

EU member state or in a state that is a contracting state party of the

Hague Convention.

No.

Rules governing recognition and enforcement of foreign judgments

include:

• Council Regulation (EC) No. 44/2001;

• the Agreement between EU and Denmark on Jurisdiction and the

Recognition and Enforcement of Judgments in Civil and Commercial

Matters;

• the Convention on Jurisdiction and the Enforcement of Judgements

in Civil and Commercial Matters, Brussels, 1968;

• the Convention on Jurisdiction and the Enforcement of Judgements

in Civil and Commercial Matters, Lugano, 1988;

• several Conventions with most of the former Portuguese colonies

on jurisdiction (and arbitration); and

• the Civil Procedure Code.

www.gettingthedealthrough.com 211

Andrade Dias & A ssociados Portugal

Rules governing recognition and enforcement of arbitral awards are

found in:

• the New York Convention on the Recognition and Enforcement

of Foreign Arbitral Awards, 1958;

• the Geneva Convention on Execution of Foreign Arbitral Awards,

1927; and

• the Civil Procedure Code.

Under general terms, what can be said is that a judgment or an award

will be recognised and enforced more easily if issued in a state or

country covered by one of the above-mentioned international rules

than if they have been produced on a state where said provisions

are inapplicable. The Civil Procedure Code shall apply exclusively

when no international rules are in force. A recognition order cannot

be issued without prior service of the defendant if the application is

lodged merely under the Civil Procedure Code. The arguments to

oppose to the recognition request are wider if only the Civil Procedure

Code is in use than if an application has been lodged pursuant

to an international set of rules.

There are no remedies available in the Portuguese jurisdiction. There

is no such tool as an anti-suit injunction.

48 What remedies are there for the defendant to stop domestic

proceedings that breach a clause providing for a foreign court or

arbitral tribunal to have jurisdiction?

Where the clause is binding under Portuguese law, the defendant

may apply in the points of defence for the formal dismissal of the

proceedings based on breach of the said clause and hence on lack of

jurisdiction of the Portuguese courts or arbitral tribunals. This will

not, however, release a defendant from the onus to oppose the claim

based on its merits. Under civil procedure rules a defendant must

concentrate all its defence efforts in the points of defence. The points

of defence are presented at an early stage of the proceedings and

hence a defendant will be forced to argue all defences – both formal

and on the merits defences – at an initial stage of the proceedings.

This will be so even if the proceedings are then subsequently dismissed

based on breach of a valid and enforceable jurisdiction clause.

A defendant is forced to use all its weapons in the points of defence

because he will not have a second chance to oppose the merits if the

jurisdiction or arbitration clause is considered inapplicable.

Limitation periods for liability

49 What time limits apply to claims? Is it possible to extend the time limit

by agreement?

A limitation period can be qualified under Portuguese law as a prescription

or a caducity limitation period. The main differences lie in

the fact that a prescription limitation period cannot be extended by

agreement and will only be interrupted with service of court proceedings

on the defendant. A caducity limitation period can be extended

by agreement and it will be interrupted merely by the filing of papers

in court.

The most relevant time limits are: tort: three years (prescription);

contract: 20 years (prescription) and carriage of goods by sea: one

year (Hague Rules) or two years (Decree-Law 352/86) (caducity).

50 May courts or arbitral tribunals extend the time limits?

No.

Miscellaneous

Pursuant to article 1(1)(2) of Decree-Law No. 201/98, a ship is

defined as a floating craft aimed at water navigation. The following

are constituent parts of the ship: her main and auxiliary engines;

appliances; fittings; lifesaving equipment; accessories; and further

equipment existing on board necessary for her operation other than

goods or merchandise carried on board as her cargo. It has been

therefore generally understood that the arrest order of a ship includes

all the above-mentioned constituent parts. It has been also generally

understood that bunkers are included in the described constituent

parts and hence are covered by an arrest order over a ship. Theoretically

speaking this may not be the case where the bunkers on board

do not belong to her owner. Therefore, the theoretical possibility of

having an exclusive arrest of the bunkers can be advanced. To date

we have not seen this tested, and this understanding may face the

impediment arising from the fact that the arrest order issued over a

ship includes her bunkers, and hence the only possibility available is

to have her lawfully arrested in full and not merely to have her bunkers

arrested. Note, however, that this may be a non-issue as most of

the situations where it is requested to arrest merely her bunkers are,

most of the time, situations where it is possible to arrest the ship for

the claim at stake (eg, claims arising from a time charter party where

bunkers belong to the charterer). Therefore it may be that in most of

the cases the arrest of the entire ship will be a way to obtain security

for a claim related to her bunkers.

Any fuel or oil that is on board as cargo of the ship can be separately

arrested.

52 Can external factors, such as the recent global restriction on the

availability of credit, affect the legal rights and liabilities of the parties

to a shipping contract?

Pursuant to the principle enshrined in our contract law provisions, all

contracts are to be strictly complied with, clause-by-clause or pointby-

point, under the principle pacta sunt servanta contained in article

406 of the Civil Code. Pursuant to this proviso a contract (or a clause

of a contract) can only be modified or terminated by agreement of

the parties or by force of some other residual provision contained in

statutory law.

The effect of any external factors such as the recent global restriction

on the availability of credit on the legal rights and liabilities of

the parties will depend firstly on what the parties have agreed in this

respect.

be advanced under contract law: termination or modification of a

contract caused by change in the circumstances that served as the

basis for the parties to enter into a contract; and frustration or objective

impossibility (non-imputable to the debtor) of a debtor to perform

its duties or obligations under the contract.

Under article 437 of the Civil Code:

If the circumstances over which the parties have based their decision

to contract have suffered an abnormal (subsequent) change, the damaged

party may elect to terminate the contract or to have it modified

under equity as long as the compliance with its contractual duties

breaches the principles of good faith and are not covered by the

inherent risks of the contract.

The counterparty may oppose the valid termination of the contract

by accepting the contract’s modification.

Pursuant to article 790 of the Civil Code:

A contractual obligation shall terminate or be cancelled where the

performance of it becomes impossible by a cause not imputable to

the debtor.

Portugal Andrade Dias & A ssociados

212 Getting the Deal Through – Shipping 2012

These general principles of Portuguese contract law have been

inserted in the following particular provisions applicable to specific

contracts.

Building or ship repair contracts

Pursuant to article 1227 of the Civil Code (provision contained in the

rules applicable to the construction or repair contracts – articles 1207

to 1230 of the Civil Code – but applicable to a ship building or repair

contract by force of Decree-Law 201/98), if the performance of the

repair or of the construction work becomes impossible by cause not

imputable to any of the parties, article 790 of Civil Code shall apply

– that is to say, the obligation shall be terminated. The owner shall

be required, however, to indemnify the builder or the repairer of the

works performed and to support the expenses incurred.

Voyage charter parties

Subject to article 14 of Decree-law No. 191/87, if the voyage or

voyages cannot be initiated on the date or seasons agreed between

the parties by a cause not imputable to the owner or to the charterer,

any of the parties may terminate the contract without incurring any

liability whatsoever for any possible damages that may arise from

said termination.

Time and bareboat charter parties

Pursuant to article 30 of Decree-law No. 191/87 freight shall not be

due during the periods in which the commercial use of the ship is

impossible by cause or any reasons not imputable to the charterer.

Carriage of goods by sea

Subject to article 13 of Decree-law No. 352/86, if the voyage cannot

be performed on the agreed date or season by a cause not imputable

to the carrier, any of the parties may terminate the contract of

carriage without incurring any liability whatsoever for any possible

damages that may arise from said termination. Pursuant to article 15

of Decree-law No. 352/86, if the shipper fails to present the goods

for loading to the carrier at the agreed place and time, the contract

is considered to be terminated; the shipper, however, is obliged to

perform payment of freight. If the shipper terminates the contract

after having delivered the goods to the carrier he will be obliged to

pay freight and the expenses that the carrier has incurred with the

goods.

purchase of a ship as it exists for the above-mentioned other contracts.

The general principles contained in articles 437 and 790 of

the Civil Code may be applied.

Portugal is not a contracting party to the Athens Convention Relating

to Carriage of Passengers and Their Luggage by Sea, 1974 or

the SDR Protocol 1976. Carriage of passengers is merely ruled by

Decree-Law 349/86. This may need to be taken into account, considering

the enormous trend of increase in cruise ship calls at Portuguese

ports. This may soon be changed pursuant to the publication

of EU Regulation 392/2009 of the Parliament and of the Council on

the liability of carriers of passengers by sea in the event of accident.

Portugal is a contracting state to the International Convention for the

Unification of Certain Rules Relating to Maritime Liens and Mortgages,

1926. Portugal is not a contracting party to the Hazardous

Noxious Substances Convention 1996 or of the Bunkers Convention

2001.

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Portugal

A Maritime, Port and Transport Law Association was recently

incorporated by some shipping and transport law practitioners.

The aim of the Association is to promote, study and improve said

branches of the law and also to promote and obtain uniformity

in the application of those areas of the law, both locally and

internationally. The Association aims to increase the number

of associates and apply for membership to some international

forums or associations, such as the Comité Maritime International.

Update and trends

Shipping 2012 I SSN 1759-0744

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